A health insurance primer for your employees during Open Enrollment
The end of open enrollment season is quickly approaching. During open enrollment, employees have the chance to choose a benefits plan or change from the plan they currently have. Read this blog post for a few things employees should consider when choosing a plan.
Now is the time to choose the best health plan for you and your family. During open enrollment season, employers and the Health Insurance Marketplace (or Exchange) let you choose a plan or change from the plan you have. Making the right choice can impact your health and your wallet.
Even if your current coverage seems satisfactory, your employer or the Exchange may offer new options that better suit your needs. It is important to compare costs and to understand differences in benefits, networks and other rules. In some states, plans available outside the official Marketplace offer attractive, low premiums but may have dollar limits on benefits, or may not provide coverage for childbirth, mental health and other services mandatory for plans that qualify under the Affordable Care Act (the “ACA” or “Obamacare”). Review and compare such plans’ terms carefully.
The time for your decision is limited. Employers generally provide a month or more to make your selection. Open enrollment for the federal Marketplace runs only from November 1, 2019, to December 15, 2019. Exceptions may be made for life changes like the birth of a child or loss of coverage under a spouse’s plan, but if you miss open enrollment season, you will probably have to wait another year to enroll. Here are some things to think about when choosing a plan.
Costs
The first cost to consider is the premium — the payment, usually monthly, to maintain coverage. If you get your plan through your job, your employer may pay all or part of the premium. If you choose a Marketplace plan, you may qualify for a premium tax credit to reduce the premium.
Other insurance costs are known as cost sharing, because you share the cost of care with your plan. They may take the form of a copay (a fixed dollar amount for each service), coinsurance (a set percentage of the cost of a service) or a deductible (the amount you must pay before your plan starts paying for services). If you select a Marketplace plan, you may qualify for cost-sharing reductions to lower those expenses.
In principle, it would be nice if all the costs were as low as possible. But usually, low-cost sharing comes with a high premium. High-deductible health plans may offer lower premiums but you will pay more out-of-pocket before your insurance pays anything.
In shopping for a health plan, consider how high a premium you are willing to pay for the level of cost sharing you would like. For example, if you or a family member have a chronic illness, you may need regular treatment and may be at risk for hospitalization. In that case, you may be willing to pay a higher premium for low-cost sharing. But if you are a healthy, young, single adult who rarely sees a doctor, you might accept a high deductible in exchange for a low premium.
Bear in mind that if you have a high-deductible health plan, you might be eligible to set up a health savings account (HSA). An HSA provides tax savings that stretch the dollars you contribute to the account to help pay for qualified medical expenses.
Choice of Doctors
If you like your current doctors and want to keep seeing them, make sure they and their facilities belong to the network of providers who have contracted with the plan you are considering. Check the plan’s online provider directory to make sure those doctors and their facilities are listed in its network. Even if you do not have a regular doctor, make sure the network includes providers close to where you live and work.
If you want to choose freely among many providers, a plan with a broad network might be for you. That may be more expensive than a plan with a narrow network, which may cost less but has a more limited choice of providers.
Out-of-Network Coverage
As good as a plan’s network might be, you may still wish to consult providers outside the network from time to time. If so, consider a Preferred Provider Organization (PPO) or Point of Service (POS) plan; each provides out-of-network benefits. With such plans, you will still spend more for out-of-network than in-network care, but at least you will have some coverage. Two other types of plans, Health Maintenance Organization (HMO) and Exclusive Provider Organization (EPO), typically will not pay for out-of-network care except for emergencies.
Who’s in Charge of Your Care?
In HMO and POS plans, you choose a primary care physician (PCP) who acts as a form of “gatekeeper” for your care. Unless it is an emergency, when you need medical treatment, you go to the PCP first. The PCP either treats you personally or refers you to specialists in your network. If you like having a PCP’s guidance, this arrangement might work for you. But if you prefer choosing specialists directly, you might opt for a PPO or EPO.
ACA-Compliant versus Association and Short-Term Plans
Whatever plan you choose, it is important to consider whether it covers all the types of healthcare you might need and whether it limits the dollar amount of your coverage. Plans that comply with the ACA are comprehensive because they have to cover 10 essential health benefits. Short-term, limited-duration (STLD) health plans, do not have to cover all those benefits. They may, for example, not cover childbirth, mental health or prescription drugs. If you end up needing care that is not covered, you will have to pay the whole cost yourself.
AHPs and STLD plans differ from ACA-compliant plans in other ways. For example, STLD plans can impose annual or lifetime dollar limits on coverage. If your care costs more than those limits, you have to pay the excess amount.
SOURCE: Gelburd, R. (5 December 2019) "A health insurance primer for your employees during Open Enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/a-health-insurance-primer-for-your-employees-during-open-enrollment
Why employers should consider adding volunteer time off benefits
Employers are being pushed to become savvier with social responsibility causes and their benefit offerings with the strong job market. This is giving rise to volunteer time off benefits. Read this blog post from Employee Benefits News for more on why employers should consider adding volunteer time off benefits.
The strong job market is pushing employers to become more savvy about socially responsible causes. This is giving rise to volunteer time off benefits as one popular strategy for employers seeking unique ways to attract and retain talent.
Indeed, 65% of companies offered paid time volunteer programs in 2018, according to data from the organization Chief Executives for Corporate Purpose, which looks to help companies transform their social strategy. That figure represents a 4% rise from 2017.
Organizations that offer employees paid days off to volunteer their time and support the nonprofit causes they care about are going to be more attractive to job seekers.
“Offering VTO as a benefit for employees is one of the best ways to engage employees with their local communities through volunteering and donations,” says Jeff Fraley, vice president of corporate engagement at United Way of the National Capital Area, an organization that provides relief of social problems affecting the community. “It encourages employees to participate in social good and helps to foster meaningful relationships within a community and the company itself.”
About 75% of millennials expect their employer to participate in social good, either with donations or through volunteering, according to a Glassdoor survey. Additionally, 51% of workers expect their employers to allocate work time and resources for their employees to volunteer for social causes.
United Way took a look at VTO benefits across the country in an effort to better understand these programs from an employer/employee perspective. The survey looked at the demographics of 49 large U.S. companies that offer VTO in order to get a sense of the types of workplaces offering this benefit. What it found was that the majority of companies that offer VTO are headquartered in New York, and in or around Silicon Valley.
Additionally, of the 49 companies studied, 12 were in the professional services industry, 12 were in the information technology industry, and nine companies were in the financial services and insurance industries. The survey also uncovered that the maximum number of volunteer hours offered per year to each employee is 20 hours, which amounts to about two and a half days of volunteer time off.
If the company with the largest revenue headquartered in each state implemented one day of VTO, the projection of total volunteer hours in the U.S. would be over 75 million hours, or nine million days, according to United Way. It would cost companies, on average, $27.4 million to implement an annual eight hour VTO policy.
“VTO is just one option if you're looking to expand your impact in the community,” Fraley says. “An employer can also sponsor a nonprofit, match employee donations, or other philanthropic initiatives. What’s important is to think about some sort of incorporation of corporate social responsibility as we're seeing that it's an increasingly important criterion of employers for millennials.”
SOURCE: Schiavo, A. (2 December 2019) "Why employers should consider adding volunteer time off benefits" (Web Blog Post). Retrieved from https://www.benefitnews.com/news/why-employers-should-consider-adding-volunteer-time-off-benefits
IRA spousal contributions can mitigate the high cost of women’s work breaks in retirement plans
According to a November 2018 study, women who took a year off from work in a 15-year period had 39 percent lower average annual earnings than women who worked continuously through that time. Read this blog post for more on how spousal contributions can mitigate the high cost of work breaks in retirement plans.
Women employees face special retirement savings challenges compared with their male counterparts. On average, they earn less and log fewer years of earned income compared to men. That’s because, in part, because women take multiple breaks from work, turn down work or decline promotions because of family care obligations.
The cost of a career break can be high. A November 2018 study by the Washington-based Institute for Women’s Policy Research found that women who took just one year off from work in a 15-year period had 39% lower average annual earnings than women who worked continuously through that time. The study also showed that the number of women taking at least one year off of work during a 15-year period was nearly twice the rate of men — 43% of women compared to 23% of men.
As a result, women are less likely to set aside money in a savings arrangement or to contribute to an employer-sponsored retirement plan.
Spousal advantage
Married women (and men) who take work breaks may stay on track with their retirement savings goals by making IRA (traditional or Roth) contributions based on their working spouse’s income — if they meet these requirements.
- The couple must file a joint federal income tax return
- The working spouse must have enough earned income to make any IRA contributions on behalf of the nonworking spouse, or, if both spouses are contributing, enough income to support both spouses’ contributions
- Assuming enough earned income, each spouse can contribute up to $6,000 (plus $1,000 if turning age 50) for 2019. This limit applies to traditional and Roth IRA contributions combined
- The spouse receiving a traditional IRA contribution must be under age 70 ½ for the entire year
- To be eligible for Roth IRA contributions, the couple must also satisfy income requirements.
Roth IRA income restrictions
The amount that an individual is eligible to contribute to a Roth IRA depends on the amount of the couple’s modified adjusted gross income (MAGI). If the couple’s joint MAGI for a tax year is less than the IRS phase-out range, each spouse can make the maximum Roth IRA contribution allowed for that tax year (assuming enough MAGI to support both spouse’s contributions). If it’s above the phase-out range, neither spouse is eligible to contribute to a Roth IRA. Keep in mind that they could still contribute to a traditional IRA, if under age 70 ½. If the couple’s joint MAGI falls within the phase-out range, their maximum contribution amount is reduced. The MAGI phase-out range is subject to cost-of-living adjustments each year.
Traditional IRA income tax deductions
Note that separate MAGI phase-out ranges apply to traditional IRA contribution deductions — another way for non-working married individuals to potentially benefit when saving for retirement with an IRA. The ability to take a federal income tax deduction for a traditional IRA contribution — if eligible — appeals to many savers. But deduction eligibility depends on whether either spouse is an “active participant” in an employer-sponsored retirement plan. An active participant is generally making or receiving contributions to her retirement plan accounts for the applicable year. Because active participants have access to a workplace retirement plan, the IRS uses its MAGI to determine whether each spouse can take a full deduction, a partial deduction or no deduction at all.
No minimum required
Regardless of which IRA a couple chooses to, the main thing is to contribute — even if it’s a small amount. There is no minimum amount that must be contributed to either type of IRA. Couples can contribute whatever they’re comfortable with, up to the previously described limit. For those concerned about not having enough to set aside in an IRA during a career break, contributing even just $500 or $1,000 for the year will still make a difference.
It certainly beats not saving at all.
SOURCE: Van Zomeren, B. (9 December 2019) "IRA spousal contributions can mitigate the high cost of women’s work breaks in retirement plans" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/ira-spousal-contributions-can-mitigate-cost-of-womens-work-breaks-in-retirement
How to maximize employee participation in HSA plans
According to the Employee Benefit Research Institute (EBRI), 96 percent of HSA account holders do not invest any portion of their contributions. Health Savings Accounts (HSAs) offer account holders the option to invest and investments are not subject to taxation. Read this blog post to learn more about maximizing employee participation in HSA plans.
High-deductible health plans (HDHPs) not only offer employees the opportunity to save on their premium contributions, they also provide access to what are commonly touted as triple-tax-advantaged health savings accounts (HSAs).
HSA users can put away money tax-free, and account distributions for eligible healthcare costs aren’t subject to federal income tax. Plus, these accounts offer users the option to invest and any investment returns aren’t subject to taxation. Not even the storied 401(k) promises this much bang for the proverbial buck. In fact, HSAs offer the best of pre-tax 401(k) and Roth contributions.
But, no matter how sweet a tax deal this is, for most of the over 25 million account holders, investing takes a back seat to current healthcare needs. According to EBRI, 96% of account holders don’t invest any portion of their balance, which leaves just 4% taking advantage of all three tax-advantaged components of the HSA. Instead, HSA users fall into two distinct categories: spenders and savers, with spenders representing over three-quarters of account holders.
In 2017, the average deductible for employee-only coverage was $2,447 and almost a quarter of employees covered under one of these plans had a deductible of $3,000 or more.
Let’s imagine it’s 2017, and our sample employee — let’s call her Emily — has a $2,500 deductible. Emily funded her HSA to the 2017 maximum of $3,400. If Emily had healthcare costs that totally eroded her deductible and she used her HSA dollars to fund them, at the end of the year Emily would have $900 left in her account ($3,400 maximum minus $2,500 to cover her deductible). That assumes no additional cost-sharing or eligible expenses.
However, Emily is in the minority. Only 13% of employees are fully funding their accounts, rendering an investment threshold potentially out of reach for most people, especially when they are using their HSA dollars for out-of-pocket healthcare costs.
With such a small percentage of HSA owners taking advantage of investment opportunities, finding effective ways to support the spending or saving habits of the majority of users seems to be tantamount. So is helping them address their concerns about deductible risk. As employers help people become smarter consumers, they may be able to build their accounts over time and ultimately pull the investment lever.
So, how can employers support these spenders and savers?
Encourage people to contribute, or to contribute more. EBRI found that only half of account holders put anything in their HSA in 2017, and just under 40% of accounts received no contributions — including employer dollars. Employer contributions can help overcome employees’ reluctance to enroll in an HDHP, but the way they are designed matters. Matching contributions act as a strong incentive for employees to save while also protecting the most vulnerable employees from having to shoulder the entire burden of out-of-pocket healthcare costs.
Another technique to help address employees’ anxiety around a high deductible is to pre-fund out-of-pocket costs by allowing employees to borrow from future contributions. If the employee incurs costs but doesn’t have enough HSA dollars to cover them, they can use future contributions as an advance against current out-of-pocket expenses. The employer provides the funds up front and the employee pays back those funds through payroll deductions. This acts as a safety net for new account holders or those without substantive balances.
Drive people toward the maximum contribution. With fewer than 20% of employees fully funding their HSA, there’s certainly room to move the needle. While additional contributions may not be possible for all employees, reinforcing the tax advantages and the portability of the HSA may help people divert more dollars to insulate themselves against healthcare costs.
Highlight ways to save on healthcare costs. When employees are funding their care before meeting a high deductible, help them spend those HSA dollars wisely. Promote telehealth if you offer it and remind employees about the most appropriate places to get care (for example, urgent care versus the emergency room). Reinforce the preventive aspects of your healthcare plan, including physicals, screenings and routine immunizations. If you have a wellness program that includes bloodwork and biometric testing, make sure you tie this into your healthcare consumerism messaging. There’s generally a lot of care employees can get at no cost, and it helps when you remind them.
Don’t lose contributors to an over-emphasis on investing. The tax advantages of investing in an HSA are undeniable, but most people are just not there yet. When we describe HSAs as a long-term retirement savings vehicle, we may inadvertently be messaging to non-participants that these accounts aren’t for them. Speak to the majority with messaging around funding near-term healthcare costs on a tax-advantaged basis and the flexibility to use HSA dollars for a wide variety of expenses beyond just doctor and pharmacy costs. Investing information should be included, but it shouldn’t be the primary focus.
HSAs are gaining in popularity, and the majority of account holders are using them to self-fund their healthcare, which is a good thing. A small but growing number are taking advantage of their plans’ investment options. Employees eventually may become investors as their accounts grow and they better understand the opportunity to grow their assets and save for the longer term. For now, however, the educational and engagement focus for HSA plan sponsors should primarily be around participation, maximizing contributions and spending HSA dollars wisely.
SOURCE: Cosgray, B. (6 December 2019) "How to maximize employee participation in HSA plans" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-maximize-employee-participation-in-hsa-plans
Improving your employee experience during open enrollment
Is your company open enrollment hosted on an online platform? Employers often struggle with employee participation during the open enrollment season. Hosting enrollments online is one way to increase employee participation this year. Read on for more tips to help ease this open enrollment season.d
For HR professionals, open enrollment is one of the most stressful and demanding times of the year. Many employers struggle with employee participation and expensive, time-consuming roll-outs. They also have to provide resources to help employees make the right plan selections for themselves and their families. As we head into another open enrollment season, consider these tips to ease the process.
Switch your open enrollments to online platforms.
If you’re still relying on paper enrollment forms, you are likely spending more money and time than you need to in pursuit of your manual work process and its many inconsistencies. Online platforms provide optimum efficiency, accuracy and convenience for your workforce, offering employee self-service options that encourage employees to take initiative in selecting the best plan for their situation. Not only will members of your workforce benefit from the convenience of being able to explore their options on their own time, but you’ll be able to offer them multi-lingual enrollment materials and have more time to assist them than ever before.
Prioritize and diversify communication.
One of the top ways to ensure a smooth open enrollment period is to use multiple communication channels, including frequent reminders regarding open enrollment deadlines. Without consistent outreach on the part of your HR officers and general managers, you will likely find yourself hunting people down to meet your enrollment and extension deadlines. Using an online self-service portal as well as traditional in-person meetings allow you to remind your employees of critical dates and changes as enrollment closes in.
The robust benefits administration system you choose should offer enrollment tracking and reporting features so you can see at a glance who still needs to begin open enrollment, who has left enrollment documents incomplete, who has made changes to their benefits (such as adding a dependent) and more. You can arrange for the system to send automatic reminders to signal the employee that further actions are needed. Providing multiple reminders will improve participation and the completion of on-time enrollments.
Help employees choose the best health plan for their situation.
In order to have the most successful open enrollment period possible, educating your employees on the different plan options available will go a long towards ensuring employee satisfaction. Studies have shown that most employees don’t have the necessary understanding of terms like “deductible” and “coinsurance,” let alone the tools to know which plan is best for their individual needs. Incorporating at-a-glance comparison tools and charts into your online or print enrollment materials can help employees make the most informed decision possible. It can also be helpful to provide educational materials like videos and simplified plan charts or cost calculators.
Keep Up with Benefit Trends and Voluntary Offerings.
Given the current labor shortage and competitive talent market, you’ll want to make sure your company is up to speed on which new benefits your competitors are looking to add, as well as which ones are appealing to specific roles, locations or generations within potential candidates from your hiring pool.
Voluntary benefits, for example, are playing an increasingly important role in employee benefits portfolios and they don’t cost you anything. Some of the most popular voluntary benefits right now include identity theft protection, pet insurance, long term care insurance and critical illness protection. If you aren’t currently offering these types of additional benefits, they could be a cost-effective way to boost employee morale, increase participation in enrollment and attract more workers to your business.
SOURCE: Smith, M. (2 December 2019) "Improving your employee experience during open enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/improving-your-employee-experience-during-open-enrollment
4 Things to Know About Mental Health at Work
Did you know: 80 percent of workers will not seek help for mental health issues because of the associated shame and stigma. Read this blog post from SHRM for four things employees and employers should know about mental health in the workplace.
Kelly Greenwood graduated summa cum laude from Duke University with degrees in psychology and Spanish. She holds a master's degree in business from Northwestern University's Kellogg School of Management, contributes to Forbes magazine and is editor-at-large for Mental Health at Work, a blog on Thrive Global.
She also is someone who has managed generalized anxiety disorder since she was a young girl. It twice led to debilitating depression. During a Smart Stage presentation at the recent Society for Human Resource Management Inclusion 2019 event in New Orleans, she discussed how someone can be a high-performing individual and still contend with mental health issues.
Greenwood had to take a leave of absence after experiencing a perfect storm at work—a new job in an understaffed, dysfunctional environment; an inflexible schedule that caused her to miss therapy sessions; and a change in her medication. When it became clear her performance had deteriorated, she was forced to disclose her condition to her manager.
She took a three-month leave, but that only fueled her anxiety. Still in her 30s, she worried about whether she would be able to return to work and feared her career was over. It wasn't. She went on to join the executive team of a nonprofit and in 2017 founded Mind Share Partners, a San Francisco-based nonprofit that offers corporate training and advising on mental health.
Greenwood shared the following four things she wishes she had known earlier in her life about mental health:
- Mental health is a spectrum. "Hardly anybody is 100 percent mentally healthy" all the time, she said. "We all go back and forth on this spectrum throughout the rest of our lives." The grief a person experiences over the loss of a loved one, for example, affects that person's mental health. "You can be successful and have a mental health condition," Greenwood said, noting that a study Mind Share Partner conducted with Harvard Business Review (HBR) found that mental health symptoms are equally prevalent across seniority levels within companies, all the way up to the C-suite.
- You cannot tell a person's mental condition by his or her behavior. "It's never your job," she told managers and other workplace leaders, "to diagnose or gather [information] or assume what's going on. Our goal at work is not to be clinicians, but to create a supportive environment."
- Mental health conditions and symptoms, including suicidal thoughts, are common. Greenwood said the Mind Share Partners/HBR study found that 60 percent of 1,500 people surveyed online in March and April said they had a mental health symptom: feeling anxious, sad or numb or experiencing a loss of interest or pleasure in most activities for at least two weeks. National Institutes of Health research suggests that up to 80 percent of people will manage a diagnosable mental health condition in their lifetime. "They may not know it," Greenwood said. "It may be a moment in time because of a job loss or grief over a death. That means mental health affects every conference call, every team meeting. It is the next frontier of diversity and inclusion."
- Workplace culture can reinforce the stigma around mental health issues. And so, 80 percent of workers will not seek help because of the associated shame and stigma. If they do, they cite a different reason, such as a headache or upset stomach, rather than admit they are taking time off because of stress. That is leading to what Greenwood calls a "huge retention issue," with 50 percent of Millennials and 75 percent of Generation Z saying they left a job—voluntarily and involuntarily—because of a mental health challenge. She advised leaders to have "courageous conversations" with those they work with. Even simply engaging in a discussion about having to deal with a child's tantrum can be powerful.
"There is so much research," she said, "about the power of vulnerability in leadership."
SOURCE: Gurchiek, K. (12 November 2019) "4 Things to Know About Mental Health at Work" (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/pages/4-things-to-know-about-mental-health-at-work.aspx
Education benefits are a critical offering to retain top talent
The top reason why employees pursue higher education and training is to keep up with or get ahead of any changes in their specific position, according to a recent survey. Read the following blog post for more on why education benefits are critical when it pertains to retaining top talent.
The American workplace is changing rapidly and so are the expectations workers have of their employers. Under pressure to keep pace with technology’s transformation of the labor market, employers are racing to up- and re-skill their workforce. They know that frontline workers, whose tasks are often most susceptible to automation, need training to remain viable and competitive.
According to this year’s Bright Horizons Working Learning Index, which surveyed more than 30,000 working learners, employees are well aware that their workplace is changing. When asked to select their top three reasons for pursuing more education or training, the most prevalent answer was that they wanted to “keep pace with or get ahead of changes in my position.” This beat out all other reasons, including advancement, opportunities at another organization and even earning more money at work.
Generation Z workers now rank education over all other benefits in importance, excluding healthcare. But they tend to differentiate between education and training, ranking education benefits above training and development.
That’s with good reason: a college degree is still the great lever for economic mobility and career advancement among frontline workers, driving higher lifetime earnings that total more than $2 million, on average. But with college costs rising, Gen Z is looking to employers to fill the gap. About four in ten Gen Z employees believe their tuition reimbursement program is the single best benefit offered by their employer. Twice as many say it is among the top three voluntary benefits.
Among the surveyed workers, three-quarters (76%) say a tuition reimbursement program would make them more likely to remain at their organization, and eight in 10 (81%) say it would make them more likely to recommend working there to a friend. Nearly two-thirds (64%) say such benefits make them “happier at work.”
Indeed, employees of all generations rank education benefits far above those offered for wellness and even above highly coveted benefits like life or disability insurance and paid family leave. In this survey, only retirement savings programs and paid sick or vacation time ranked more highly.
Importantly, nearly half (49%) said they would not have pursued education if their employers did not offer tuition assistance. Slightly more (55%) say the time commitment required for a degree or certification under their employer’s tuition assistance program is the biggest challenge they faced — as a result, many see the value of competency-based and self-paced learning options, often delivered online.
Data like this may change the calculus for employers considering investments in not just upskilling but education. While it may seem counterintuitive, employers must offer their frontline workers broad learning opportunities and educational benefits that can help them move beyond their current positions and pursue the next steps of their careers. Companies must have the foresight to invest in their potential.
SOURCE: Donovan, P. (22 November 2019) "Education benefits are a critical offering to retain top talent" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/offering-education-benefits-retains-top-talent
What to do when your state says you need a retirement plan
Did you know: Almost 25 percent of U.S. adults lack any retirement savings. In response to these findings, many states are beginning to require employees to participate in state-sponsored retirement programs. Read the following blog post to learn what to do when your state requires you to participate in a state-sponsored retirement plan.
We’re all too aware of the looming retirement crisis. Almost 25% of adults in the United States lack any retirement savings, according to the Federal Reserve. In response, a number of states have decided to enact legislation that require employees to participate in their state-sponsored retirement program.
What does this mean for business owners not currently offering a plan?
For businesses operating in a state where legislation has been proposed, it’s very likely that they will have to make some changes in the not-so-distant future. Some state plans come with penalties for not enrolling, while others offer appealing incentives for involvement. However, the real question may not be whether you want to offer a state-sponsored plan, but rather, whether a state-sponsored plan is the right option.
Most state-sponsored plans are designated as Roth IRAs, using investments chosen by the state, and are low-cost. However, there are also benefits to creating a customized plan that works for you and your employees. Issuing your own plan allows you to:
- Select your own investments to include the right fund variety and offer user-friendly models like target-date funds;
- Create your own plan design so you have more control over things like company matching and eligibility rules;
- Derive significantly greater tax benefits because a 401(k) plan allows deductions of pre-tax earnings of up to $19,000 whereas an IRA only permits deductions of up to $6,000 in earnings;
- Borrow against your plan in times of emergency; and
- Keep costs equally low thanks to new entrants and advanced technology that eliminates overhead.
- While state-sponsored plans are getting the conversation started, it’s important to look at the bigger picture strategy and determine the best short- and long-term decisions.
To better understand the urgency behind any retirement plan decision, it’s worth digging deeper into the specific requirements of your state. But regardless of what state you’re in, there are many perks to offering a company-sponsored retirement plan such as tax incentives, recruitment and retention benefits, and investing in your employee’s future. And thanks to new entrants and advanced technology, many traditional inefficiencies and excess fees have been eliminated, keeping costs down.
States are putting emphasis on the retirement crisis and stepping in to help. But at the end of the day, this is about setting your employees — and yourself — up for retirement security. Look at the current proposals in your jurisdiction, think about what you’re trying to accomplish, and determine what will offer the greatest value for you and your team. Everyone deserves retirement security.
SOURCE: Brecher, A. (22 November 2019) "What to do when your state says you need a retirement plan" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/what-to-do-when-your-state-says-you-need-a-retirement-plan
Key factors in choosing your benefits during open enrollment
Employers are now realizing that in order to attract and retain talent, they have to provide the best benefits. But, how do employees select the right benefits out of all the available options? Read the following blog post from Employee Benefit News for a few key factors to consider when choosing your benefits during open enrollment.
Even if you are a veteran in choosing employer-sponsored benefits, the landscape is shifting. Over the past years, we’ve seen changes to mental health counseling stipends, extended maternity/paternity leave and family building. Companies across industries are realizing that in order to attract and retain talent, they need to provide best in class benefits that save employers unforeseen costs in the long run, and shows employees that their employers are invested in their wellbeing — in and out of the office.
With all these available options and only a short window to select what’s right for you, here’s what should you look out for during open enrollment.
Which benefits matter to me?
The beauty of a diverse workforce is that employees may represent various walks of life. However, this means that not all benefits make sense for every person. Perhaps your boss is prioritizing childcare for his toddler while your colleague is looking to refinance student loans. Whatever your life circumstance, ask yourself, “Which benefits are most pertinent to my life and life goals in the coming year?”
For instance, fertility benefits may not be immediately attractive at first glance, even if you’re actively thinking about starting a family. But 1 in 8 couples will be impacted by infertility and treatment without coverage can be wildly expensive. It’s important to make sure you’re thinking critically and getting all the necessary information when browsing for your benefits. Rule of thumb: if this could impact you in the coming year, even if you’re not 100% sure, opt-in for coverage.
What’s actually covered?
During open enrollment, be sure to ask your benefits team about how robust each offering is and what’s included. A particular benefit may look like it has a lot to offer, but after further investigation, you may uncover restrictions, unforeseen out of pocket costs and other obstacles that may make it harder for you to utilize the benefit.
With fertility benefits, many conventional carriers offer coverage with a dollar maximum, meaning you’d max out on coverage before completing a full IVF cycle. Plus, there are additional costs outside of the basic IVF procedure, like diagnostic testing, medications, and genetic testing which may come with a hefty price tag you’d have to pay for. Without adequate coverage, many people have to make cost-based decisions, forgoing the technology they need to reach a successful outcome.
As an alternative, Progyny’s coverage is bundled, meaning your entire treatment event is covered and you do not have to worry about what is or is not included, or fear running out of coverage mid-way through. Many vendors have similar disruptive solutions to ensure they’re not leaving their members high and dry during difficult times.
When sifting through options, be sure you’re asking what’s covered and not covered under your plan. A lot of benefits may seem expansive, but make sure you’re getting the most out of the coverage that’s available to you. Ask: Are the best clinics in your area included in your plan as “in-network”? Do you have to meet medical necessity requirements before being allowed to access your benefits?
Which benefits are supported?
Once you’ve opted in for benefits during open enrollment, how do you access your benefit? How do you move forward with treatment? Does your benefit provide access to the doctors in your area? Since many of these offerings are complex and without proper onboarding, how can you be expected to understand the next steps?
With the growing emphasis on mental health and concierge member experience, companies like Progyny try to eliminate some of the member’s burden and create an easy to use benefit model that provides member support. For example, our dedicated Patient Care Advocates — a concierge-style fertility coach — helps members navigate the clinical and emotional aspects of your fertility treatment, making a difficult process a bit easier.
Another important factor to consider when shopping for benefits is access to care where you live — are the doctors that your insurance covers close by and easy to get to? When choosing your benefits, look out for any information about access to support. The goal of a benefit is to make your life easier, not leave you feeling confused and stressed in times of need.
What do I do if I’m unhappy with the benefits offered during open enrollment?
Often times, employers are unaware of what an employee wants until it’s brought to their attention. If you are unhappy with the benefits offered, raise the issue with your HR team! You are your own best advocate and change begins with you.
Not sure where to start? If you are comfortable, speak with your colleagues. Seek out a company resource group to see if others have similar needs. This way you can help form a plan or a way to approach HR. Once you have an idea of what you need, talk to HR to explain why the proposed benefit would be pertinent to you and your colleagues. Employers understand that the key to keeping good talent is making sure they’re happy.
Open enrollment can be overwhelming but take advantage of the resources you have. Ask questions, do your research, and discuss the options with experts in your office. With an arsenal of helpful information at your disposal, open enrollment should be stress-free and get you excited for all of the incredible employer-sponsored benefits in your future.
SOURCE: Ajmani, K. (25 November 2019) "Key factors in choosing your benefits during open enrollment" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/how-to-choose-benefits-during-open-enrollment
Know your people, know your data: Keys to measuring employee engagement
According to research, over half of employees believe that health insurance is important in terms of their job satisfaction. Read the following blog post for ways employers can measure employee engagement.
Offering a total compensation and benefits package that fits employee needs drives morale, motivation and performance in the workplace.
Simply put, people who are happy and healthy are more productive. When an organization offers benefits that appeal to employees (and workers know how to use these benefits) employers should see an increase in total productivity.
On the other hand, if a company is off the mark with the total compensation package, or simply hasn’t communicated the benefits to people correctly, it will either see unchanged productivity or a decline. Organizations struggling to find improvement in productivity should look at their employee benefits offerings for answers.
Providing effective group health insurance and well-being programs is a good way to reduce the amount of sick leave worker's take. If employees promptly get healthcare when they’re ill, they’re more likely to be healthier overall. If an organization doesn’t offer appropriate health benefits, the result can be presenteeism.
Additionally, the cost of presenteeism multiplies when sick staff are contagious. One sick person refusing to take a day off can snowball into multiple people arriving ill to work on subsequent days. When illnesses reach critical mass and it’s harder for people to recover from things like the flu or a cold, organizations may find themselves short-staffed when employees finally pay to see a doctor.
Job satisfaction and morale are also linked to employee benefits. Research shows more than half of employees believe that health insurance is important in terms of their job satisfaction — even more crucial if staff live in an area where medical services are expensive.
Strategies to measure benefits engagement. HR staff have multiple ways of measuring how certain workplace functions are performing. Here are some effective methods organizations can use to measure benefits engagement.
Staff surveys. Questionnaires that seek to understand what benefits your staff know they have, and how they’ll use them.
Pulse surveys. Asking staff short, frequent questions about a benefits platform.
Focus groups. Gathering cross-functional groups of staff members together to have a facilitated discussion about benefits.
Exit surveys. Include questions about benefits and satisfaction levels during exit surveys, and then investigate what their next employer might be offering to have lured them away.
If organizations are not regularly questioning how well their benefits plan is performing, they may be missing an opportunity to get key insights into how employees feel about their packages.
Offering employee benefits isn’t just to support an organization’s staff, it should also support an organization’s long-term sustainability. Employee engagement is one key measure. The challenge for organizations is ensuring not only that they include benefits that will be relevant to staff, but also that they properly educate them in what those benefits are.
The less staff are educated on what benefits exist and how they can use them, the less likely they are to engage with them. Not having an appropriate communication strategy can often set benefits plan performance behind.
Working with analytics and claims data can indicate when specific benefits aren’t being used. Knowing what causes the lack of engagement requires a bit of discussion and investigation, but finding sustainable solutions is completely dependent on understanding whether the issue is the benefits themselves, or the communication to staff.
SOURCE: Rider, S. (1 November 2019) "Know your people, know your data: Keys to measuring employee engagement" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/using-data-to-measure-employee-engagement